Marks and Spencer Food

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Transcript of Marks and Spencer Food

Marks and Spencer FoodCompany BackgroundMarks and Spencer started in Leeds in 1884, selling food right from the beginningTheir five principles are 'Value, Quality, Service, Innovation and Trust'They sell a range of quality food products aimed at the more affluent consumer Food accounts for 54% of Marks and Spencer's UK turnover and last year had a revenue of £4.9bnMany of M&S's stores sell food and there are also 419 simply food shopsPEST AnalysisThere is a stable political background and favorable economic conditions for M&S to operate inGreen agendas continue to grow and this is an important factor for M&S's thinking processBoth e-commerce and m-commerce are increasing along with other advanced technologiesSWOT Analysis Market Environment Porter's Five ForcesM&S is very vulnerable towards competition because of UK's broad food sector, facing competition from Waitrose, Tesco, Sainsbury's etc. M&S is differentiating from competition by positioning itself as a higher-quality value for money brandLow threat of new entrants. The market is mature and a new entrant would have to offer something radically new Customer Relationship Strategies

M&S's main strength is a combination of quality and one of the widest ranges of food in the UKA big opportunity would be to start selling food onlineHowever a weakness is their size in comparison with their competitors and their small range of branded products. And they face the threat of competition from other quality food retailers such as Waitrose, particularly in terms of online salesCustomer AcquisitionAcquisition is process of gaining new customers or converting existing prospects into customers. The process is specifically concerned with acquiring as many customers as possible at the lowest cost CustomerRetentionCustomer retention is the maintenance of continuous trading relationships with customers over the long term Customer DevelopmentCustomer Development is the process of growing the value of retained customers by attempting to cross-sell and up-sell products to their customer base. Customer Life cycleZoi Santikou - 1304 7153 Fatima Kanu - 1105 0340Anna Bucknell - 1101 9861 Lill Veronica Reitan - 1104 3811Marks and Spencer's CRM Strategy Conclusion and RecommendationsConclusion Marks and Spencer focuses mainly on the acquisition of new customers as well as the retention of current ones

Although acquisition is a more expensive process, it is vital for the company to continue into the future, especially as food is currently the best performing division of the business

The strategy that Marks and Spencer's food department has chosen is sustainable, in particular their use of social media and commitment to quality and provenance. RecommendationsOnline shopping with home delivery with possible use of a third party deliverer such as OcadoImplementation of loyalty cardsPerks for customers with loyalty cards such as free tea and coffee MacroenvironmentEconomic instability – could continue Focused on current customers – producing range of quality food at a premium price. If slow growth economy continues – M&S may not get a new customer base but could also lose current customers to cheaper competitors.

Investment in Quality GoodsMore customer awareness Creates a demand for short traveled foodM&S capitalize by promoting their commitment to sourcingAll meat is produce in the UK and Ireland Can be used to the acquiring of new customers

Social MediaCommunicating with existing customers Creating brand awareness to attract new customers.

Unique Selling PointsM&S has a similar way of operating as its main competitors like Waitrose. M&S has some unique selling points like their forever fish campaign.

OverallThe strategies are sustainable to attract new customers Replenishes customers who have stopped using the M&S’s services. Keeping their current customers happy and informed of any changes or new products or services. Could develop their customers more and get them interested in other parts of M&S – such as clothing and general merchandise.

Free Recipe Cards Recipes online and instoreEncourages extra purchasesAll contain less than 400 caloriesFood to OrderRange of party/ entertainment food and cakesCan only be picked up instoreOffers a connection with the core consumerAlso an opportunity for development Use of Leaflets Wide range of leaflets for other M&S services such as flowers and their bankPlaced in strategic areas Offers an opportunity for development Customer Help and Information Stores contain a help deskExtensive online help and FAQ sectionReceiving information is easy for customersIncreases customer valueGiftcardsM&S have giftcards available for a range of amountsCan be used in the food departmentIncreases brand awarenessAlso ensures that all the money is spent in storeStrategies UsedWide Range of Food Offered M&S offer a wide range of foods such as healthy meals and foreign cuisinesExtensive range of convenience and ready mealsAlso sell many sandwiches and lunch itemsExample of understanding their consumerIndependent Weekly Price Matching Every week M&S match their prices with their competitorsAllows them to remain competitive and also acquire new customersThey also offer promotions on products such as 'Dine in for £10'Quality Sourcing of Produce The company have a big commitment to provenanceHigh quality food offered and a responsible supply chainWere not involved in the 2013 horsemeat scandalAll meat and fish sourced from the UKPartnership with the Marine Conservation Society M&S donate to the MCS through their forever fish campaignM&S are recognised as having 90% of their wild fish as coming from sustainable sourcesUse of Social MediaPresence on many social media sitesPages are for the whole company but contain food related postsRaises brand awareness - in particular to a younger generationM&S also now have an appOverall Strategies Overall StrategyThe majority of the strategies used by M&S are a combination of Acquisition and Retention.Acquiring customers depends on how effective the organisation is able to build a comprehensive relationship with the customer.Retaining customers depends on customer satisfaction, resolving customer problems/disputes, and keeping customers coming back.Development is also followed as a strategy by M&S but not as much as the combination of acquisition and retention.Is this Sustainable?

M&S will gain New CustomersIt could block competitionBuild Customer Loyalty; Sell Aggressively, Growth Will FollowMarket powerHigh costValue may not be added for the acquirer.Financial consequencesUnrelated diversificationToo much focusAdvantagesAcquisition DisadvantagesCross selling and up sellingOffering upgrades, special deals and free gifts (such as three for two) is a great way to convince customers to spend a little moreIt costs less to sell to existing customers than it does to find new businessBeneficial word of mouthNo need of establishing reputation, improving skills or quality of products, customer is already convincedToo much focus on retention of existing customers rather than on the acquisition of new onesRisk of customers feeling overwhelmedDivided loyaltyPotential risk of customers leaving M&S and shop elsewhereRetention AdvantagesDisadvantages